exv10w66






Exhibit 10.66




Workers’ Compensation Quota Share

Reinsurance Contract

Effective: July 1, 2009




issued to




Guarantee Insurance Company

Fort Lauderdale, Florida

and

any other insurance companies and/or affiliates which are now or

hereafter come under the ownership, control or management of

Guarantee Insurance Company









 









 





Workers’ Compensation Quota Share

Reinsurance Contract

Effective: July 1, 2009




issued to




Guarantee Insurance Company

Fort Lauderdale, Florida

and

any other insurance companies and/or affiliates which are now or

hereafter come under the ownership, control or management of

Guarantee Insurance Company




Coverage A




	 	 	 	 	 
	Reinsurer
	 	Participation
	Swiss Reinsurance America Corporation

	 	 		 25.0%
	 
	 	 	 	 
	Total

	 	 	 	25.0% part of 
100% share in 
the interests and 
liabilities of the 
“Reinsurer”








Coverage B




	 	 	 	 	 
	Reinsurer
	 	Participation
	Swiss Reinsurance America Corporation

	 	 		 25.0 %
	 
	 	 	 	 
	Total

	 	 	 	25.0% part of 
100% share in 
the interests and
 liabilities of the
 “Reinsurer”












 









 





Table of Contents




	 	 	 	 	 	 
	 	Article	 	 	Page
	 	 
	 	Preamble	 	1
	 	I
	 	Classes of Business Reinsured	 	1
	 	II
	 	Commencement and Termination	 	2
	 	III
	 	Territory (BRMA 51A)	 	3
	 	IV
	 	Exclusions	 	3
	 	V
	 	Special Acceptances	 	6
	 	VI
	 	Retention and Limit	 	7
	 	VII
	 	Loss Occurrence	 	8
	 	VIII
	 	Loss in Excess of Policy Limits/ECO	 	8
	 	IX
	 	Other Reinsurance	 	9
	 	X
	 	Claims and Loss Adjustment Expense	 	9
	 	XI
	 	Annuities at Company's Option	 	10
	 	XII
	 	Commutation	 	11
	 	XIII
	 	Salvage and Subrogation	 	11
	 	XIV
	 	Original Conditions	 	12
	 	XV
	 	Commission	 	12
	 	XVI
	 	Reports and Remittances	 	12
	 	XVII
	 	Late Payments	 	13
	 	XVIII
	 	Offset (BRMA 36B)	 	14
	 	XIX
	 	Access to Records (BRMA 1D)	 	14
	 	XX
	 	Errors and Omissions (BRMA 14F)	 	14
	 	XXI
	 	Currency (BRMA 12A)	 	15
	 	XXII
	 	Taxes (BRMA 50B)	 	15
	 	XXIII
	 	Federal Excise Tax (BRMA 17D)	 	15
	 	XXIV
	 	Reserves	 	15
	 	XXV
	 	Insolvency	 	17
	 	XXVI
	 	Arbitration	 	18
	 	XXVII
	 	Agency Agreement (BRMA 73A)	 	19
	 	XXVIII
	 	Severability (BRMA 72E)	 	19
	 	XXIX
	 	Service of Suit (BRMA 49C)	 	19
	 	XXX
	 	Confidentiality	 	19
	 	XXXI
	 	Governing Law (BRMA 71B)	 	20
	 	XXXII
	 	Entire Agreement	 	20
	 	XXXIII
	 	Notices and Contract Execution	 	20
	 	XXXIV
	 	Intermediary	 	21











 









 





Workers’ Compensation Quota Share

Reinsurance Contract

Effective: July 1, 2009




issued to




Guarantee Insurance Company

Fort Lauderdale, Florida

and

any other insurance companies and/or affiliates which are now or

hereafter come under the ownership, control or management of

Guarantee Insurance Company

(hereinafter referred to collectively as the “Company”)




by




The Subscribing Reinsurer(s) Executing the

Interests and Liabilities Agreement(s)

Attached Hereto

(hereinafter referred to as the “Reinsurer”)




Preamble





	A.	 	In the event any affiliated companies are to be reinsured hereunder, whenever the word
“Company” is used in this Contract, such term shall be held to include any or all of the
affiliated companies which are or may hereafter be under common control, provided that
notice be given to the Reinsurer of any such newly affiliated companies which may
hereafter come under common control as soon as practicable with full particulars as to how
such affiliation is likely to affect this Contract. In the event of either party maintaining
that
such affiliation calls for alteration in existing terms, and an agreement for alteration not
being arrived at, then the business of such newly affiliated company is covered at existing
terms only for a period of 45 days after notice by either party that it does not wish to cover
such business.
	 
	B.	 	The retention of the Company and the liability of the Reinsurer and all other benefits
accruing to the Company as provided in this Contract or any amendments hereto, shall
apply to the affiliated companies comprising the Company as a group and not separately to
each of the affiliated companies.





Article I — Classes of Business Reinsured





	A.	 	By this Contract the Company obligates itself to cede to the Reinsurer and the
Reinsurer obligates itself to accept quota share reinsurance of the Company’s gross liability
under policies, contracts and binders of insurance or reinsurance (hereinafter called
“policies”) in force at the effective date hereof or issued or renewed on or after that date,
and classified by the Company as Traditional Workers’ Compensation (including, but not limited
to,










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	 	 	business further classified by the Company as Preferred Agency Captives) and/or Employers
Liability business (including losses arising from the United States Longshore and Harbor
Workers’ Compensation Act, Jones Act, Federal Employers Liability Act, and any other Federal
act), subject to the terms, conditions and limitations hereinafter set forth.
	 
	B.	 	The liability of the Reinsurer with respect to each cession hereunder shall commence
obligatorily and simultaneously with that of the Company, subject to the terms, conditions and
limitations hereinafter set forth.





Article II — Commencement and Termination





	A.	 	This Contract shall become effective at 12:01 a.m., Local Standard Time where the policy is
issued, July 1, 2009, with respect to losses arising out of loss occurrences commencing at
or after that time and date, and shall remain in force until 12:01 a.m., Local Standard Time
where the policy is issued, July 1, 2010.
	 
	B.	 	At the sole option of the Company, this Contract may be terminated at any time by the
Company giving the Reinsurer 45 days prior written notice.
	 
	C.	 	Notwithstanding the provisions of paragraph A above, the Company may terminate a
Subscribing Reinsurer’s percentage share in this Contract at any time by giving written
notice to the Subscribing Reinsurer in the event any of the following circumstances occur:






	 	1.	 	The Subscribing Reinsurer’s policyholders’ surplus (or its equivalent under the
Subscribing Reinsurer’s accounting system) at the inception of this Contract has been
reduced by more than 20.0% of the amount of surplus (or the applicable equivalent) 12
months prior to that date; or
	 
	 	2.	 	The Subscribing Reinsurer’s policyholders’ surplus (or its equivalent under the
Subscribing Reinsurer’s accounting system) at any time during the term of this Contract
has been reduced by more than 20.0% of the amount of surplus (or the applicable
equivalent) at the date of the Subscribing Reinsurer’s most recent financial statement
filed with regulatory authorities and available to the public as of the inception of this
Contract; or
	 
	 	3.	 	The Subscribing Reinsurer’s A.M. Best’s rating has been assigned or downgraded
below A- and/or Standard & Poor’s rating has been assigned or downgraded below BBB+;
or
	 
	 	4.	 	The Subscribing Reinsurer has become merged with, acquired by or controlled by any
other entity or individual(s) not controlling the Subscribing Reinsurer’s operations at
the inception of this Contract; or
	 
	 	5.	 	A State Insurance Department or other legal authority has placed the Subscribing
Reinsurer under regulatory supervision or has ordered the Subscribing Reinsurer to
cease writing business; or
	 
	 	6.	 	The Subscribing Reinsurer has become insolvent or has been placed into liquidation,
receivership, supervision, administration, winding-up or under a scheme of arrangement,
or similar proceedings (whether voluntary or involuntary) or proceedings










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	 	 	 	have been instituted against the Subscribing Reinsurer for the appointment of a receiver,
liquidator, rehabilitator, supervisor, administrator, conservator or trustee in
bankruptcy, or other agent known by whatever name, to take possession of its assets or
control of its operations; or
	 
	 	7.	 	The Subscribing Reinsurer has reinsured its entire liability under this Contract
with an unaffiliated entity or entities without the Company’s prior written consent; or
	 
	 	8.	 	The Subscribing Reinsurer has ceased assuming new or renewal property or casualty
treaty reinsurance business; or
	 
	 	9.	 	The Subscribing Reinsurer has hired an unaffiliated runoff claims manager that is
compensated on a contingent basis or is otherwise provided with financial incentives
based on the quantum of claims paid.






	D.	 	Unless otherwise mutually agreed, reinsurance hereunder on business in force on the
effective date of termination or expiration shall remain in full force and effect until
expiration,
cancellation or next premium anniversary of such business, whichever first occurs, but in no
event beyond 12 months, plus odd time, following the effective date of termination or
expiration.
	 
	E.	 	Notwithstanding the provisions of paragraph C above, if the Company is prohibited or
precluded by the appropriate regulatory authorities, or by law (in those states where
applicable and enforced), from arranging mid-term cancellation or non-renewal of any
policies subject to this Contract beyond their natural expiry, the Reinsurer agrees to extend
coverage under this Contract until such policies may be terminated or non-renewed by the
Company.
	 
	F.	 	“Term of this Contract” as used herein shall mean the period from 12:01 a.m., Local
Standard Time where the policy is issued, July 1, 2009, until 12:01 a.m., Local Standard
Time where the policy is issued, July 1, 2010. However, if this Contract is terminated,
“term of this Contract” as used herein shall mean the period from 12:01 a.m., Local Standard
Time where the policy is issued, July 1, 2009, through the effective date of termination if
this Contract is terminated on a “cutoff” basis, or through the end of the runoff period if
this
Contract is terminated on a “runoff” basis.





Article III — Territory (BRMA 51A)



The territorial limits of this Contract shall be identical with those of the Company’s policies.




Article IV — Exclusions





	A.	 	This Contract does not apply to and specifically excludes the following:






	 	1.	 	Assumed reinsurance, except 100% of business ceded by fronting insurance
companies.
	 
	 	2.	 	Liability of the Company arising by contract, operation of law, or otherwise, from
its participation or membership, whether voluntary or involuntary, in any insolvency
fund.










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	 	 	 	“Insolvency fund” includes any guaranty fund, insolvency fund, plan, pool, association,
fund or other arrangement, howsoever denominated, established or governed, that provides
for any assessment of or payment or assumption by the Company of part or all of any
claim, debt, charge, fee, or other obligation of an insurer, or its successors or
assigns, that has been declared by any competent authority to be insolvent, or that is
otherwise deemed unable to meet any claim, debt, charge, fee or other obligation in whole
or in part.
	 
	 	3.	 	Loss or liability accruing to the Company directly or indirectly from any insurance
written by or through any pool, association, or syndicate, including pools, associations,
or syndicates in which membership by the Company is required under any statutes or
regulations.
	 
	 	4.	 	Loss or damage which is occasioned by war, invasion, hostilities, acts of foreign
enemies, civil war, rebellion, insurrection, military or usurped power, or martial law or
confiscation by order of any government or public authority. Nevertheless, this exclusion
shall not apply to loss or damage occasioned by riots, strikes, civil commotion,
vandalism, malicious damage, and acts of terrorism.
	 
	 	5.	 	All loss or liability of the Company excluded by the “Nuclear Risk Exclusion”
attached hereto.
	 
	 	6.	 	Manufacturing, packaging, handling, shipping or storage of explosives, explosive
substances intended for use as an explosive, ammunitions, fuses, arms, or fireworks.
However, this exclusion shall not apply to the incidental packaging, handling or storage
of same in connection with the sale or transportation by owner operators of such
substances.
	 
	 	7.	 	Loss arising from professional sports teams. For the purpose of this exclusion,
“professional sports team” shall mean an organization of more than 15 people (including
athletes, coaches, and staff) that exists for the purpose of competing in regularly
scheduled sporting events and whose members are receiving compensation from the
organization at the time of the loss occurrence.
	 
	 	8.	 	Loss sustained by commercial airline personnel on board the aircraft and arising
while the aircraft is in flight. The following definitions shall apply to this
exclusion:






	 	a.	 	“Commercial airline” shall mean an organization in the business of
transporting
passengers and/or goods by aircraft;
	 
	 	b.	 	“Personnel” shall mean employees of the commercial airline acting
within the
scope of their employment; and
	 
	 	c.	 	“In flight” shall mean from the time the door(s) close for departure to
the time the
door(s) open for arrival.






	 	9.	 	Liability arising out of, or resulting as a consequence of, insureds principally
involved
in the manufacture, distribution, installation, testing, remediation, removal, storage,
disposal, sale, use of or exposure to asbestos.










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	 	10.	 	Railroads, except scenic railways, and access lines and industrial aid owner
operations when written as an incidental part of an insured’s overall operations.
	 
	 	11.	 	Chemical or petrochemical manufacturing.
	 
	 	12.	 	Underground mining.
	 
	 	13.	 	Loss arising from the intentional wrecking or demolition of buildings or
structures in excess of three stories.
	 
	 	14.	 	Losses arising from the United States Longshore and Harbor Workers’ Compensation Act,
Jones Act, Federal Employers Liability Act, Maritime Employers Liability Act, and any
other Federal act if the payroll for such business is greater than 10.0% of the total
payroll for the original insured’s total operations including such business.
	 
	 	15.	 	Financial Guarantee and Insolvency.
	 
	 	16.	 	Risks with known occupational disease exposures per NCCI D&E codes.
	 
	 	17.	 	Construction of bridges, tunnels or dams.
	 
	 	18.	 	Firefighters and police officers.
	 
	 	19.	 	Trucks hauling explosives or ammunition (local or long distance hauling) -
all employees.
	 
	 	20.	 	Manufacturing, packing, handling, shipping or storage of natural or artificial fuel
gases, butane, propane, gasoline, or liquefied petroleum gas. However, this exclusion
shall not apply to the incidental packing, handling or storage of same in connection with
the sale of such substances.
	 
	 	21.	 	Gas or oil burner installation NOC.
	 
	 	22.	 	Gasoline service stations tank installations.
	 
	 	23.	 	Blasting of rock.
	 
	 	24.	 	Sewer construction — all operations.
	 
	 	25.	 	Gas main, steam main, or water main construction or connection construction.
	 
	 	26.	 	Boat manufacturing — F classes.
	 
	 	27.	 	Banks and trust company employees of contracting agencies in bank service:
guards, patrols, messengers or armored car crews.
	 
	 	28.	 	Detective agencies.
	 
	 	29.	 	Patrol agencies only in regard to armed guard services.
	 
	 	30.	 	Alternative Market business including professional employer organizations.















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	 	31.	 	All loss, damage, cost, or expense directly or indirectly caused by,
contributed to by, resulting from, or arising out of or in connection with any act of
terrorism involving biological, chemical, radioactive or nuclear explosion, pollution,
contamination and/or fire following thereon.






	B.	 	If the Company is bound, without the knowledge and contrary to the instructions of the
Company’s supervisory underwriting personnel, on any business falling within the scope of
one or more of the exclusions set forth in paragraph A, the exclusion shall be suspended
with respect to such business until 30 days after an underwriting supervisor of the Company
acquires knowledge thereof. Notwithstanding the foregoing, if the Company is prevented
from canceling a policy within such period by applicable statute or regulation, such policy
shall be covered hereunder until the earliest date on which the Company may cancel.
	 
	 	 	It is understood and agreed that the provisions of this paragraph B shall not apply to the
exclusions set forth in subparagraphs 1, 2, 3, 4, 5, 9, 15, 16, 30 and 31 of paragraph A
above.
	 
	C.	 	If the Company is required to accept an assigned risk which conflicts with one or more of
the exclusions set forth in paragraph A, reinsurance shall apply, but in no event shall the
Reinsurer’s liability exceed the limits set forth in the Retention and Limit Article.





Article V — Special Acceptances





	A.	 	From time to time the Company may request a special acceptance of reinsurance falling
outside the scope of the provisions of this Contract. Within 15 days of receipt of such a
request, each Subscribing Reinsurer shall accept such request, ask for additional
information, or reject the request. Any reinsurance that is specially accepted by the
Reinsurer shall be covered under this Contract and shall be subject to the terms hereof,
except as such terms shall be modified by the special acceptance. If a Subscribing
Reinsurer fails to respond to a special acceptance request within 15 days, the Subscribing
Reinsurer will be deemed to have agreed to the special acceptance.
	 
	B.	 	If Subscribing Reinsurers with total percentage shares in the interests and liabilities of
the
Reinsurer of 50.0% or greater agree to a special acceptance, such special acceptance shall
be binding on all Subscribing Reinsurers with respect to their respective shares. If such
percentage agreement is not achieved, such special acceptance shall be made to this
Contract only with respect to the interests and liabilities of each Subscribing Reinsurer that
agrees to the special acceptance.
	 
	C.	 	In the event a reinsurer becomes a party to this Contract subsequent to one or more special
acceptances hereunder, the new reinsurer shall automatically accept such special
acceptance(s) as being covered hereunder. Further, if one or more Subscribing Reinsurers
under this Contract agreed to special acceptance(s) under the contract being replaced by
this Contract, such special acceptance(s) shall be automatically covered hereunder with
respect to the interests and liabilities of such Subscribing Reinsurer(s).










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Article VI — Retention and Limit





	A.	 	Coverage A: As respects Preferred Agency Captive business, the Company shall cede to
the Reinsurer and the Reinsurer agrees to accept 100% of the Company’s gross liability.
Notwithstanding the foregoing, the Company’s ceded net earned premium from Preferred
Agency Captive business subject hereto shall not exceed $18,000,000 during the term of
this Contract. Furthermore, as respects Preferred Agency Captive business, the Company
shall retain at least a 25.0% part of 100% share, net and unreinsured, in the interests and
liabilities of the Reinsurer.
	 
	B.	 	Coverage B: As respects business subject to this Contract other than Preferred Agency
Captive business, the Company shall cede to the Reinsurer and the Reinsurer agrees to
accept 100% of the Company’s gross liability. Notwithstanding the foregoing, the Company
shall retain at least a 7.0% part of 100% share, net and unreinsured, in the interests and
liabilities of the Reinsurer as respect business originating in the states of Florida, Georgia
and New Jersey; and at least a 25.0% part of 100% share, net and unreinsured, in the
interests and liabilities of the Reinsurer as respect business originating in states other than
Florida, Georgia and New Jersey.
	 
	C.	 	Notwithstanding the provisions of paragraphs A and B above, the liability of the Reinsurer
shall not exceed $500,000 (inclusive of any self-insured retentions under policies covered
hereunder) as respects all losses and loss adjustment expense arising out of any one loss
occurrence, nor shall it exceed $1,000,000 as respects all losses arising out of acts of
terrorism commencing during the term of this Contract.
	 
	D.	 	“Net earned premium” as used herein is defined as gross earned premium of the Company
for the classes of business reinsured hereunder, less the earned portion of premiums ceded
by the Company for reinsurance which inures to the benefit of this Contract.
	 
	 	 	For purposes of calculating net earned premium, premium ceded by the Company for reinsurance
which inures to the benefit of this Contract is deemed to be equal to 11.0% of the gross
earned premium of the Company for the classes of business reinsured hereunder.
	 
	E.	 	“Act of terrorism” as used herein shall mean either:






	 	1.	 	Any act of any person or persons either acting on behalf of or in connection with
any organization or group with activities directed towards overthrowing, intimidating,
coercing or influencing any government de jure or de facto or its populace or its
economic, political or social systems, by force, violence, weapons of mass destruction,
the destruction, disruption or subversion of communication and information system
infrastructures and/or its content thereof, or sabotage, and/or threat therefrom; or
	 
	 	2.	 	An act of terrorism that is certified by the Secretary of Treasury, in
concurrence with the Secretary of State and the Attorney General of the United States.






	 	 	Notwithstanding the above, in the event of a loss occurrence which arises out of an act of
workplace violence and is not consistent with the provisions of subparagraph 1 or 2 of this
paragraph E, such loss shall be covered hereunder, subject to the provisions of the Retention
and Limit Article and all other provisions of this Contract and shall not be considered an act
of terrorism. Further, any loss occurrence which is not or cannot be










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	 	 	determined, classified or certified in accordance with the provisions of subparagraph 1 or 2 of
this paragraph E, shall be covered hereunder and not considered an act of terrorism.





Article VII — Loss Occurrence





	A.	 	“Loss occurrence” as used herein is defined as an accident or occurrence or a series of
accidents or occurrences arising out of or caused by one event. However, as respects
losses resulting from occupational or industrial disease or cumulative trauma suffered by
employees of an insured for which the employer is liable as a result of a sudden and
accidental event not exceeding 72 hours in duration, all such losses shall be considered
one loss occurrence and may be combined with losses not classified as occupational or
industrial disease or cumulative trauma that arise out of the same event, and the
combination of such losses shall be considered as one loss occurrence within the meaning
hereof.
	 
	B.	 	“Occupational or industrial disease” as used herein shall mean any abnormal condition that
fulfills all of the following conditions:






	 	1.	 	It is not traceable to a definite compensable accident occurring during the
employee’s past or present employment;
	 
	 	2.	 	It has been caused by exposure to a disease producing agent or agents present in
the worker’s occupational environment; and
	 
	 	3.	 	It has resulted in disability or death.






	C.	 	“Cumulative trauma” as used herein shall mean an injury that fulfills all of the
following
conditions:






	 	1.	 	It is not traceable to a definite compensable accident occurring during the
employee’s past or present employment;
	 
	 	2.	 	It has occurred from, and has been aggravated by, a repetitive
employment-related activity; and
	 
	 	3.	 	It has resulted in disability or death.





Article VIII — Loss in Excess of Policy Limits/ECO





	A.	 	In the event the Company pays or is held liable to pay an amount of loss in excess of its
policy limit, but otherwise within the terms of its policy (hereinafter called “loss in excess
of policy limits”) or any punitive, exemplary, compensatory or consequential damages, other
than loss in excess of policy limits (hereinafter called “extra contractual obligations”)
because of alleged or actual bad faith, negligence or fraud on its part in rejecting an offer
of settlement within policy limits, or in the preparation of the defense or in the trial of an
action against its insured or reinsured, or in the preparation or prosecution of an appeal
consequent upon such an action, or in otherwise handling a claim under a policy subject to this
Contract, 90.0% of the loss in excess of policy limits and/or the extra contractual










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		 	obligations shall be added to the Company’s loss, if any, under the policy involved, and the
sum thereof shall be subject to the provisions of the Retention and Limit Article.
	 
	B.	 	An extra contractual obligation shall be deemed to have occurred on the same date as the
loss covered or alleged to be covered under the policy.
	 
	C.	 	Notwithstanding anything stated herein, this Contract shall not apply to any loss in excess
of policy limits or any extra contractual obligation incurred by the Company as a result of
any fraudulent and/or criminal act by any officer or director of the Company acting
individually or collectively or in collusion with any individual or corporation or any other
organization or party involved in the presentation, defense or settlement of any claim
covered hereunder.
	 
	D.	 	Recoveries from any form of insurance or reinsurance which protects the Company against
claims the subject matter of this Article shall inure to the benefit of this Contract.
	 
	E.	 	Savings Clause (Applicable only if the Subscribing Reinsurer is domiciled in the State of
New York): In no event shall coverage be provided to the extent that such coverage is not
permitted under New York law.





Article IX — Other Reinsurance



The Company shall be permitted to carry excess of loss reinsurance, recoveries under which shall
inure to the benefit of this Contract.




Article X — Claims and Loss Adjustment Expense





	A.	 	Losses shall be reported by the Company in summary form as hereinafter provided, but the
Company shall notify the Reinsurer immediately when a specific case involves unusual
circumstances or large loss possibilities. The Reinsurer shall have the right to
participate, at its own expense, in the defense of any claim or suit or proceeding involving this
reinsurance.
	 
	B.	 	All loss settlements made by the Company, whether under strict policy conditions or by way
of compromise, shall be binding upon the Reinsurer, and the Reinsurer agrees to pay or
allow, as the case may be, its proportion of each such settlement in accordance with the
Reports and Remittances Article. It is agreed, however, that if the Reinsurer’s share of any
loss is equal to or greater than $500,000, the Reinsurer will pay its share of said loss as
promptly as possible after receipt of reasonable evidence of the amount paid (or scheduled
to be paid) by the Company.
	 
	C.	 	Notwithstanding the provisions of paragraph B above, any ex-gratia settlement made by the
Company on a loss subject to this Contract shall be binding on the Reinsurer, provided the
Company has submitted the settlement to the Reinsurer and received the Reinsurer’s
agreement to the settlement. If the ex-gratia settlement is accepted by the Reinsurer, it
shall be subject to the terms of this Contract.
	 
	 	 	“Ex-gratia settlements,” as used in this Contract, shall mean all settlements of losses not
covered under the express terms of the policies, and which are primarily motivated by a










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	 	 	customer business relationship. “Ex-gratia settlements” will not include settlements of
losses which arise from court decisions or other judicial acts or orders.
	 
	D.	 	In the event of a claim under a policy subject hereto, the Reinsurer shall be liable for
its proportionate share of loss adjustment expense incurred by the Company in connection
therewith, and shall be credited with its proportionate share of any recoveries of such
expense.
	 
	E.	 	“Loss adjustment expense” as used herein shall mean costs and expenses incurred by the
Company in connection with the investigation, appraisal, adjustment, settlement, litigation,
defense or appeal of a specific claim or loss, or alleged loss, including but not limited to:






	 	1.	 	Court costs;
	 
	 	2.	 	Costs of supersedeas and appeal bonds;
	 
	 	3.	 	Monitoring counsel expenses;
	 
	 	4.	 	Legal expenses and costs incurred in connection with coverage questions and legal
actions connected thereto, including but not limited to declaratory judgment actions;
	 
	 	5.	 	Post-judgment interest;
	 
	 	6.	 	Pre-judgment interest, unless included as part of the award or judgment;
	 
	 	7.	 	Expenses and a pro rata share of salaries of Company field employees, calculated in
accordance with the time occupied in adjusting such loss, and expenses of other Company
employees who have been temporarily diverted from their normal and customary duties and
assigned to the field adjustment of losses covered by this Contract; and
	 
	 	8.	 	Subrogation, salvage and recovery expenses.






	 	 	Loss adjustment expense does not include salaries and expenses of the Company’s
employees (except as provided in subparagraph 7 above), office or other overhead
expenses.





Article XI — Annuities at Company’s Option





	A.	 	Whenever the Company is required, or elects, to purchase an annuity or to negotiate a
structured settlement, either in satisfaction of a judgment or in an out-of-court settlement or
otherwise, the cost of the annuity or the structured settlement, as the case may be, shall be
deemed part of the Company’s loss.
	 
	B.	 	The terms “annuity” or “structured settlement” shall be understood to mean any insurance
policy, lump sum payment, agreement or device of whatever nature resulting in the
payment of a lump sum by the Company in settlement of any or all future liabilities which
may attach to it as a result of a loss occurrence.










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	C.	 	In the event the Company purchases an annuity which inures in whole or in part to the
benefit of the Reinsurer, it is understood that the liability of the Reinsurer is not
released thereby. In the event the Company is required to provide benefits not provided
by the annuity for whatever reason, the Reinsurer shall pay its proportional share of any
loss.





Article XII — Commutation





	A.	 	This Article will only take effect should the parties hereto mutually agree to commute one or
any number of the Workers’ Compensation losses under this Contract. There will be no
obligation on the part of either party to so commute.
	 
	B.	 	Should the Company become liable for any loss hereunder, and be required to make
periodic payments to or otherwise set up on its books reserves for such loss, at any time
after seven years following the effective time and date of this Contract and upon mutual
agreement of the Company and the Reinsurer, said loss (including loss adjustment
expense) may be commuted. If the value of said loss, including amounts falling to the
share of the Reinsurer, cannot be agreed upon by the parties to this Contract, said value
may be determined by employing one of the following:






	 	1.	 	A present value calculation based on the following criteria:






	 	a.	 	In respect of all unindexed benefits, the present value calculation shall
be determined based upon an annual discount equal to the five-year U.S. Treasury
note rate at the time of commutation;
	 
	 	b.	 	In respect of all future medical costs, the present value calculation
shall be based upon the Company’s evaluation of long term medical care and rehabilitation
requirements, using an annual discount equal to the five-year U.S. Treasury note
rate at the time of commutation, and an annual escalation equal to the Medical
Care Consumer Price Index (CPI-MC) at the time of commutation;
	 
	 	c.	 	Where applicable, impaired life expectancy, survivors’ life expectancy,
as well as remarriage probability shall be reflected in the calculation by employing tables
required by statute.






	 	2.	 	The Company may determine the present value by purchasing (or obtaining a
quotation for) an annuity from any A.M. Best’s Class VIII IIA+II rated or better annuity
writer, with an AAA rating by Standard & Poor’s.






	C.	 	The Reinsurer’s proportion of the amount determined will be considered its total liability
for such loss and the lump sum payment thereof shall constitute a complete release of both
parties from liability hereunder for the commuted losses.
	 
	D.	 	This Article shall survive the termination or expiration of this Contract.





Article XIII — Salvage and Subrogation



The Reinsurer shall be credited with its proportionate share of salvage (i.e., reimbursement
obtained or recovery made by the Company, less the actual cost, excluding salaries of officials









Page 11









 




and employees of the Company and sums paid to attorneys as retainer, of obtaining such
reimbursement or making such recovery) on account of claims and settlements involving
reinsurance hereunder. The Company hereby agrees to enforce its rights to salvage or
subrogation relating to any loss, a part of which loss was sustained by the Reinsurer, and to
prosecute all claims arising out of such rights if, in the Company’s opinion, it is
economically reasonable to do so.




Article XIV — Original Conditions





	A.	 	All reinsurance under this Contract shall be subject to the same rates, terms, conditions,
waivers and interpretations, and to the same modifications and alterations as the respective
policies of the Company. However, in no event shall this be construed in any way to
provide coverage outside the terms and conditions set forth in this Contract. The Reinsurer
shall be credited with its exact proportion of the net earned premium received by the
Company.
	 
	B.	 	Nothing herein shall in any manner create any obligations or establish any rights against
the Reinsurer in favor of any third party or any persons not parties to this Contract.





Article XV — Commission





	A.	 	The Reinsurer shall allow the Company a 25.0% commission on all premiums ceded to the
Reinsurer hereunder prior to any deductions for the earned portion of premiums ceded by
the Company for reinsurance that inures to the benefit of this Contract. The Company shall
allow the Reinsurer return commission on return premiums at the same rate.
	 
	B.	 	It is expressly agreed that the ceding commission allowed the Company includes provision
for all dividends, commissions, taxes, assessments, and all other expenses of whatever
nature, except loss adjustment expense.





Article XVI — Reports and Remittances





	A.	 	Within 30 days after the end of each month, the Company shall report to the Reinsurer:






	 	1.	 	Ceded net earned premium for the month;
	 
	 	2.	 	Commission calculated in accordance with the Commission Article;
	 
	 	3.	 	Ceded losses and loss adjustment expense paid during the month (net of any
recoveries during the month under the “cash call” provisions of the Claims and Loss
Adjustment Expense Article);
	 
	 	4.	 	Ceded outstanding loss reserves as of the end of the month.






	 	 	The positive balance of (1) less (2) less (3) shall be remitted by the Company with its report.
Any balance shown to be due the Company shall be remitted by the Reinsurer as promptly as
possible, but in no event later than 15 days, after receipt and verification of the Company’s
report.















Page 12









 












	B.	 	Annually, the Company shall furnish the Reinsurer with such information as the
Reinsurer may require to complete its Annual Convention Statement.





Article XVII — Late Payments





	A.	 	The provisions of this Article shall not be implemented unless specifically invoked,
in writing, by one of the parties to this Contract.
	 
	B.	 	In the event any premium, loss or other payment due either party is not received by the
intermediary named in the Intermediary Article (hereinafter referred to as the “Intermediary”)
by the payment due date, the party to whom payment is due may, by notifying the
Intermediary in writing, require the debtor party to pay, and the debtor party agrees to pay,
an interest penalty on the amount past due calculated for each such payment on the last
business day of each month as follows:






	 	1.	 	The number of full days which have expired since the due date or the last
monthly calculation, whichever the lesser; times
	 
	 	2.	 	1/365ths of the sum of 1.0% and the U.S. prime rate as quoted in The Wall
Street Journal on the first day of the month for which the calculation is made;
times
	 
	 	3.	 	The amount past due, including accrued interest.






	 	 	It is agreed that interest shall accumulate until payment of the original amount due plus
interest penalties have been received by the Intermediary.
	 
	C.	 	If the interest rate provided under this Article exceeds the maximum interest rate allowed by
any applicable law or is held unenforceable by an arbitrator or a court of competent
jurisdiction, such interest rate shall be modified to the highest rate permitted by the
applicable law, and all remaining provisions of this Article and Contract shall remain in full
force and effect without being impaired or invalidated in any way.
	 
	D.	 	The establishment of the due date shall, for purposes of this Article, be determined as
follows:






	 	1.	 	As respects any routine payment, adjustment or return due either party, the due
date shall be as provided for in the applicable section of this Contract. In the event
a due date is not specifically stated for a given payment, it shall be deemed due 30 days
after the date of transmittal by the Intermediary of the initial billing for each such
payment.
	 
	 	2.	 	As respects a “cash call” made in accordance with the last sentence of paragraph B
of the Claims and Loss Adjustment Expense Article, payment shall be deemed due 20 days
after the proof of loss or demand for payment is transmitted to the Reinsurer. If such
loss or claim payment is not received within the 20 days, interest will accrue on the
payment or amount overdue in accordance with paragraph B above, from the date the proof
of loss or demand for payment was transmitted to the Reinsurer.















Page 13









 












	 	3.	 	As respects any payment, adjustment or return due either party not otherwise
provided for in subparagraphs 1 and 2 of this paragraph, the due date shall be deemed
as 30 days following transmittal of written notification that the provisions of this
Article have been invoked.






	 	 	For purposes of interest calculations only, amounts due hereunder shall be deemed paid upon
receipt by the Intermediary.
	 
	E.	 	Nothing herein shall be construed as limiting or prohibiting a Subscribing Reinsurer from
contesting the validity of any claim, or from participating in the defense of any claim or
suit, or prohibiting either party from contesting the validity of any payment or from initiating any
arbitration or other proceeding in accordance with the provisions of this Contract. If the
debtor party prevails in an arbitration or other proceeding, then any interest penalties due
hereunder on the amount in dispute shall be null and void. If the debtor party loses in such
proceeding, then the interest penalty on the amount determined to be due hereunder shall
be calculated in accordance with the provisions set forth above unless otherwise
determined by such proceedings. If a debtor party advances payment of any amount it is
contesting, and proves to be correct in its contestation, either in whole or in part, the other
party shall reimburse the debtor party for any such excess payment made plus interest on
the excess amount calculated in accordance with this Article.
	 
	F.	 	Interest penalties arising out of the application of this Article that are $1,000 or less
from any party shall be waived unless there is a pattern of late payments consisting of three or
more items over the course of any 12-month period.





Article XVIII — Offset (BRMA 36B)



The Company and the Reinsurer may offset any balance or amount due from one party to the other
under this Contract or any other contract heretofore or hereafter entered into between the Company
and the Reinsurer, whether acting as assuming reinsurer or ceding company. However, in the event of
the insolvency of any party hereto, offset shall only be allowed in accordance with applicable law.




Article XIX — Access to Records (BRMA 1D)



The Reinsurer or its designated representatives shall have access at any reasonable time to all
records of the Company which pertain in any way to this reinsurance.




Article XX — Errors and Omissions (BRMA 14F)



Inadvertent delays, errors or omissions made in connection with this Contract or any transaction
hereunder shall not relieve either party from any liability which would have attached had such
delay, error or omission not occurred, provided always that such error or omission is rectified as
soon as possible after discovery.









Page 14









 





Article XXI — Currency (BRMA 12A)





	A.	 	Whenever the word “Dollars” or the “$” sign appears in this Contract, they shall be
construed to mean United States Dollars and all transactions under this Contract shall be in
United States Dollars.
	 
	B.	 	Amounts paid or received by the Company in any other currency shall be converted to
United States Dollars at the rate of exchange at the date such transaction is entered on the
books of the Company.





Article XXII — Taxes (BRMA 50B)



In consideration of the terms under which this Contract is issued, the Company will not claim a
deduction in respect of the premium hereon when making tax returns, other than income or profits
tax returns, to any state or territory of the United States of America or the District of Columbia.




Article XXIII — Federal Excise Tax (BRMA 17D)





	A.	 	The Reinsurer has agreed to allow for the purpose of paying the Federal Excise Tax the
applicable percentage of the premium payable hereon (as imposed under Section 4371 of
the Internal Revenue Code) to the extent such premium is subject to the Federal Excise
Tax.
	 
	B.	 	In the event of any return of premium becoming due hereunder the Reinsurer will deduct
the applicable percentage from the return premium payable hereon and the Company or its
agent should take steps to recover the tax from the United States Government.





Article XXIV — Reserves





	A.	 	The Reinsurer agrees to fund its share of the Company’s ceded outstanding loss and
loss adjustment expense reserves (including incurred but not reported loss reserves) by:






	 	1.	 	Clean, irrevocable and unconditional letters of credit issued or confirmed, if
confirmation is required by the regulatory authorities involved, by a bank or banks
meeting the NAIC Securities Valuation Office credit standards for issuers of letters of
credit and acceptable to the Company; and/or
	 
	 	2.	 	Escrow accounts for the benefit of the Company; and/or
	 
	 	3.	 	Cash advances;






	 	 	if the Reinsurer is unauthorized in any state of the United States of America or the District
of Columbia having jurisdiction over the Company and if, without such funding, a penalty would
accrue to the Company on any financial statement it is required to file with the insurance
regulatory authorities involved.










Page 15









 






	 	 	The Reinsurer, at its sole option, may fund in other than cash if its method and form of
funding are acceptable to the insurance regulatory authorities involved.
	 
	B.	 	With regard to funding in whole or in part by letters of credit, it is agreed that each
letter of credit will be in a form acceptable to insurance regulatory authorities involved, will be
issued for a term of at least one year and will include an “evergreen clause,” which automatically
extends the term for at least one additional year at each expiration date unless written
notice of non-renewal is given to the Company not less than 30 days prior to said expiration
date. The Company and the Reinsurer further agree, notwithstanding anything to the
contrary in this Contract, that said letters of credit may be drawn upon by the Company or
its successors in interest at any time, without diminution because of the insolvency of the
Company or the Reinsurer, but only for one or more of the following purposes:






	 	1.	 	To reimburse itself for the Reinsurer’s share of losses and/or loss adjustment
expense paid under the terms of policies reinsured hereunder, unless paid in cash by the
Reinsurer;
	 
	 	2.	 	To reimburse itself for the Reinsurer’s share of any other amounts claimed to be
due hereunder, unless paid in cash by the Reinsurer;
	 
	 	3.	 	To fund a cash account in an amount equal to the Reinsurer’s share of any
ceded outstanding loss and loss adjustment expense reserves (including incurred but
not reported loss reserves) funded by means of a letter of credit which is under
non-renewal notice, if said letter of credit has not been renewed or replaced by the
Reinsurer 10 days prior to its expiration date;
	 
	 	4.	 	To refund to the Reinsurer any sum in excess of the actual amount required to
fund the Reinsurer’s share of the Company’s ceded outstanding loss and loss adjustment
expense reserves (including incurred but not reported loss reserves), if so requested
by the Reinsurer.






	 	 	In the event the amount drawn by the Company on any letter of credit is in excess of the
actual amount required for B(1) or B(3), or in the case of B(2), the actual amount
determined to be due, the Company shall promptly return to the Reinsurer the excess amount
so drawn.
	 
	C.	 	If, during the term of a letter of credit, the issuing bank no longer meets the credit
standards set forth in paragraph A above, the Reinsurer agrees to replace such letter of credit within
15 days with a form of funding that meets the requirements set forth in paragraph A above.
	 
	D.	 	If a Subscribing Reinsurer fails to fulfill its funding obligation (if any) under this
Article, the Company may, at its option, require the Subscribing Reinsurer to pay, and the Subscribing
Reinsurer agrees to pay, an interest charge on the funding obligation calculated on the last
business day of each month as follows:






	 	1.	 	The number of full days that have expired since December 31 of the calendar year in
which the funding was required; times
	 
	 	2.	 	1/365ths of the sum of 1.0% and the U.S. prime rate as quoted in The Wall
Street Journal on the first day of the month for which the calculation is made;
times










Page 16









 






	 	3.	 	The greater of (a) the funding obligation, less the amount, if any, funded by the
Subscribing Reinsurer prior to December 31 of the calendar year in which the funding was
required or (b) $5,000.






	 	 	It is agreed that interest shall accumulate until the full interest charge amount as
provided for in this paragraph and the funding obligation are paid.
	 
	 	 	If the interest rate provided under this Article exceeds the maximum interest rate allowed by
any applicable law or is held unenforceable by an arbitrator or a court of competent
jurisdiction, such interest rate shall be modified to the highest rate permitted by the
applicable law, and all remaining provisions of this Article and Contract shall remain in full
force and effect without being impaired or invalidated in any way.
	 
	E.	 	At annual intervals, or more frequently as agreed, but never more frequently than
quarterly, the Company shall prepare a specific statement of the Reinsurer’s share of the
Company’s ceded outstanding loss and loss adjustment expense reserves (including incurred but
not reported loss reserves) for the sole purpose of amending the letter of credit, in the
following manner:






	 	1.	 	If the statement shows that the Reinsurer’s share of the Company’s ceded
outstanding loss and loss adjustment expense reserves (including incurred but not
reported loss reserves) exceeds the balance of credit as of the statement date, the
Reinsurer shall, within 30 days after receipt of notice of such excess, secure delivery
to the Company of an amendment to the letter of credit increasing the amount of credit by
the amount of such difference.
	 
	 	2.	 	If, however, the statement shows that the Reinsurer’s share of the Company’s ceded
outstanding loss and loss adjustment expense reserves (including incurred but not
reported loss reserves) is less than the balance of credit as of the statement date, the
Company shall, within 30 days after receipt of written request from the Reinsurer,
release such excess credit by agreeing to secure an amendment to the letter of credit
reducing the amount of credit available by the amount of such excess credit.





Article XXV — Insolvency





	A.	 	In the event of the insolvency of one or more of the reinsured companies, this
reinsurance shall be payable directly to the company or to its liquidator, receiver,
conservator or statutory successor on the basis of the liability of the company without
diminution because of the insolvency of the company or because the liquidator, receiver,
conservator or statutory successor of the company has failed to pay all or a portion of any
claim. It is agreed, however, that the liquidator, receiver, conservator or statutory
successor of the company shall give written notice to the Reinsurer of the pendency of a claim
against the company indicating the policy or bond reinsured which claim would involve a
possible liability on the part of the Reinsurer within a reasonable time after such claim is
filed in the conservation or liquidation proceeding or in the receivership, and that during
the pendency of such claim, the Reinsurer may investigate such claim and interpose, at its own
expense, in the proceeding where such claim is to be adjudicated, any defense or defenses that
it may deem available to the company or its liquidator, receiver, conservator or statutory
successor. The expense thus incurred by the Reinsurer shall be chargeable, subject to the
approval of the Court, against the company as part of the expense of conservation or










Page 17









 






	 	 	liquidation to the extent of a pro rata share of the benefit which may accrue to the company
solely as a result of the defense undertaken by the Reinsurer.
	 
	B.	 	Where two or more reinsurers are involved in the same claim and a majority in interest elect
to interpose defense to such claim, the expense shall be apportioned in accordance with
the terms of this Contract as though such expense had been incurred by the company.
	 
	C.	 	It is further understood and agreed that, in the event of the insolvency of one or more of
the reinsured companies, the reinsurance under this Contract shall be payable directly by the
Reinsurer to the company or to its liquidator, receiver or statutory successor, except as
provided by Section 4118(a) of the New York Insurance Law or except (1) where this
Contract specifically provides another payee of such reinsurance in the event of the
insolvency of the company or (2) where the Reinsurer with the consent of the direct insured
or insureds has assumed such policy obligations of the company as direct obligations of the
Reinsurer to the payees under such policies and in substitution for the obligations of the
company to such payees.





Article XXVI — Arbitration





	A.	 	As a condition precedent to any right of action hereunder, in the event of any dispute or
difference of opinion hereafter arising with respect to this Contract, it is hereby mutually
agreed that such dispute or difference of opinion shall be submitted to arbitration. One
Arbiter shall be chosen by the Company, the other by the Reinsurer, and an Umpire shall
be chosen by the two Arbiters before they enter upon arbitration, all of whom shall be active
or retired disinterested executive officers of insurance or reinsurance companies or Lloyd’s
London Underwriters. In the event that either party should fail to choose an Arbiter within
30 days following a written request by the other party to do so, the requesting party may
choose two Arbiters who shall in turn choose an Umpire before entering upon arbitration. If
the two Arbiters fail to agree upon the selection of an Umpire within 30 days following their
appointment, each Arbiter shall nominate three candidates within 10 days thereafter, two of
whom the other shall decline, and the decision shall be made by drawing lots.
	 
	B.	 	Each party shall present its case to the Arbiters within 60 days following the date of
appointment of the Umpire. The Arbiters shall consider this Contract as an honorable
engagement rather than merely as a legal obligation and they are relieved of all judicial
formalities and may abstain from following the strict rules of law. The decision of the
Arbiters shall be final and binding on both parties; but failing to agree, they shall call in
the Umpire and the decision of the majority shall be final and binding upon both parties.
Judgment upon the final decision of the Arbiters may be entered in any court of competent
jurisdiction.
	 
	C.	 	If more than one reinsurer is involved in the same dispute, all such reinsurers may
constitute and act as one party for purposes of this Article and communications shall be
made by the Company to each of the reinsurers constituting one party, provided, however,
that nothing herein shall impair the rights of such reinsurers to assert several, rather than
joint, defenses or claims, nor be construed as changing the liability of the reinsurers
participating under the terms of this Contract from several to joint.
	 
	D.	 	Each party shall bear the expense of its own Arbiter, and shall jointly and equally bear with
the other the expense of the Umpire and of the arbitration. In the event that the two










Page 18









 






	 	 	Arbiters are chosen by one party, as above provided, the expense of the Arbiters, the
Umpire and the arbitration shall be equally divided between the two parties.
	 
	E.	 	Any arbitration proceedings shall take place at a location mutually agreed upon by the
parties to this Contract, but notwithstanding the location of the arbitration, all
proceedings pursuant hereto shall be governed by the law of the State of Florida.





Article XXVII — Agency Agreement (BRMA 73A)



If more than one reinsured company is named as a party to this Contract, the first named company
shall be deemed the agent of the other reinsured companies for purposes of sending or receiving
notices required by the terms and conditions of this Contract, and for purposes of remitting or
receiving any monies due any party.




Article XXVIII — Severability (BRMA 72E)



If any provision of this Contract shall be rendered illegal or unenforceable by the laws,
regulations or public policy of any state, such provision shall be considered void in such state,
but this shall not affect the validity or enforceability of any other provision of this Contract or
the enforceability of such provision in any other jurisdiction.




Article XXIX — Service of Suit (BRMA 49C)



(Applicable if the Reinsurer is not domiciled in the United States of America, and/or is not
authorized in any State, Territory or District of the United States where authorization is required
by insurance regulatory authorities)





	A.	 	It is agreed that in the event the Reinsurer fails to pay any amount claimed to be due
hereunder, the Reinsurer, at the request of the Company, will submit to the jurisdiction of a
court of competent jurisdiction within the United States. Nothing in this Article
constitutes or should be understood to constitute a waiver of the Reinsurer’s rights to commence an
action in any court of competent jurisdiction in the United States, to remove an action to a
United States District Court, or to seek a transfer of a case to another court as permitted by
the laws of the United States or of any state in the United States.
	 
	B.	 	Further, pursuant to any statute of any state, territory or district of the United States
which makes provision therefor, the Reinsurer hereby designates the party named in its Interests
and Liabilities Agreement, or if no party is named therein, the Superintendent,
Commissioner or Director of Insurance or other officer specified for that purpose in the
statute, or his successor or successors in office, as its true and lawful attorney upon whom
may be served any lawful process in any action, suit or proceeding instituted by or on
behalf of the Company or any beneficiary hereunder arising out of this Contract.





Article XXX — Confidentiality



The Reinsurer, except with the express prior written consent of the Company, shall not directly or
indirectly, communicate, disclose or divulge to any third party, any knowledge or information









Page 19









 




that may be acquired either directly or indirectly as a result of the inspection of the
Company’s books, records and papers. The restrictions as outlined in this Article shall not
apply to communication or disclosures that the Reinsurer is required to make to auditors, both
internal and external, outside actuaries, consultants, retrocessionaires, legal counsel,
arbitrators involved in any arbitration procedures under this Contract or disclosures required
upon subpoena or other duly issued order of a court or other governmental agency or regulatory
authority; however, such third parties are to be informed of these confidentiality restrictions
by the Reinsurer. The Reinsurer shall not share, communicate or otherwise disseminate the
Company’s confidential information obtained by virtue of its subscription to this Contract with
any employees (either of the Reinsurer or any affiliate) associated with its direct insurance
operations.




Article XXXI — Governing Law (BRMA 71B)



This Contract shall be governed by and construed in accordance with the laws of the State of
Florida.




Article XXXII — Entire Agreement



This Contract sets forth all of the duties and obligations between the Company and the Reinsurer
and supersedes any and all prior or contemporaneous written agreements with respect to matters
referred to in this Contract. This Contract may not be modified or changed except by an
amendment to this Contract in writing signed by both parties.




Article XXXIII — Notices and Contract Execution





	A.	 	Whenever a notice, statement, report or any other written communication is required by this
Contract, unless otherwise specified, such notice, statement, report or other written
communication may be transmitted by certified or registered mail, nationally or
internationally recognized express delivery service, personal delivery, electronic mail, or
facsimile. With the exception of notices of termination, first class mail is also
acceptable.
	 
	B.	 	The use of any of the following shall constitute a valid execution of this Contract or
any amendments thereto:






	 	1.	 	Paper documents with an original ink signature;
	 
	 	2.	 	Facsimile or electronic copies of paper documents showing an original ink
signature; and/or
	 
	 	3.	 	Electronic records with an electronic signature made via an electronic agent.
For the purposes of this Contract, the terms “electronic record,” “electronic signature”
and “electronic agent” shall have the meanings set forth in the Electronic Signatures in
Global and National Commerce Act of 2000 or any amendments thereto.






	C.	 	This Contract may be executed in one or more counterparts, each of which, when duly
executed, shall be deemed an original.










Page 20









 





Article XXXIV — Intermediary



Aon Benfield Inc., or one of its affiliated corporations duly licensed as a reinsurance
intermediary, is hereby recognized as the Intermediary negotiating this Contract for all business
hereunder. All communications (including but not limited to notices, statements, premiums, return
premiums, commissions, taxes, losses, loss adjustment expense, salvages and loss settlements)
relating to this Contract will be transmitted to the Company or the Reinsurer through the
Intermediary. Payments by the Company to the Intermediary will be deemed payment to the Reinsurer.
Payments by the Reinsurer to the Intermediary will be deemed payment to the Company only to the
extent that such payments are actually received by the Company.



In Witness Whereof, the Company by its duly authorized representative has executed this
Contract as of the date undermentioned at:




Fort
Lauderdale, Florida, this 6th day of November in the year 2009.




	 	 	 	 	 
	 	 	 
	 	
/s/ Charles Schuver
 	 
	 	Guarantee Insurance Company (for and on behalf of the “Company”) 	 
	 	     Charles K Schuver

     Chief Underwriting Officer 	 
	 









Page 21









 








NUCLEAR RISK EXCLUSION



This Contract does not apply to loss arising from, whether directly or indirectly, whether
proximate or remote:





	 	a)	 	Any Nuclear Facility, Nuclear Hazard or Nuclear Reactor;
	 
	 	b)	 	Any Nuclear Material, Radioactive Material, Nuclear Reaction, Nuclear
Radiation or radioactive contamination, all whether controlled or uncontrolled;
or
	 
	 	c)	 	Any Nuclear Material, Radioactive Material, Nuclear Reaction, Nuclear
Radiation or radioactive contamination, all whether controlled or uncontrolled,
caused directly or indirectly by, contributed to or aggravated by an Event;
	 
	 	d)	 	Any Spent Fuel or Waste;
	 
	 	e)	 	Any Fissionable Substance; or
	 
	 	f)	 	Any nuclear device or bomb.





As used in this Exclusion:





	 	 	“Fissionable Substance” means any prescribe substance that is, or from which can be obtained, a
substance capable of releasing atomic energy by nuclear fission.
	 
	 	 	“Nuclear Facility” means:






	 	 	 	any Nuclear Reactor;
	 
	 	 	 	any apparatus designed or used to sustain nuclear fission in a self-supporting chain
reaction or to contain a critical mass of plutonium, thorium and uranium or any one or
more of them;
	 
	 	 	 	any equipment or device designed or used for (i) separating the isotopes of plutonium,
thorium and uranium or any one or more of them, (ii) processing or utilizing spent
fuel, or (iii) handling, processing or packaging Waste;
	 
	 	 	 	any equipment or device used for the processing, fabricating or alloying of Special
Nuclear Material if at any time the total amount of such material in the custody of the
insured at the premises where such equipment or device is located consists of or contains
more than 25 grams of plutonium or uranium 233 or any combination thereof, or more than
250 grams of uranium 235;
	 
	 	 	 	any equipment or device used for the processing, fabricating or alloying of plutonium,
thorium or uranium enriched in the isotope uranium 233 or in the isotope uranium 235, or
any one or more of them if at any time the total amount of such material in the custody of
the insured at the premises where such equipment or device is located consists of or
contains more than 25 grams of plutonium or uranium 233 or any combination thereof, or
more than 250 grams of uranium 235;
	 
	 	 	 	any structure, basin, excavation, premises or place prepared or used for the storage
or disposal of Waste or Radioactive Material, and includes the site on which any of
the





Page 1 of 2









 






	 	 	 	foregoing is located, all operations conducted on such site and all premises used for such
operations.






	 	 	“Nuclear Hazard” means the radioactive, toxic, explosive or other hazardous properties
of Radioactive Material or Nuclear Material.
	 
	 	 	“Nuclear Material” means Source Material, Special Nuclear Material or Byproduct Material.
	 
	 	 	“Nuclear Reactor” means any apparatus designed or used to sustain nuclear fission in a
self-supporting chain reaction or to contain a critical mass of fissionable material.
	 
	 	 	“Radioactive Material” means uranium, thorium, plutonium, neptunium, their respective
derivatives and compounds, radioactive isotopes of other elements and any other substances that
the Atomic Energy Control Board may, by regulation, designate as being prescribed substances
capable of releasing atomic energy, or as being requisite for the production, use or
application of atomic energy.
	 
	 	 	“Source Material,” “Special Nuclear Material,” and “Byproduct Material” have the meanings given
them in the Atomic Energy Act of 1954 or in any law amendatory thereof.
	 
	 	 	“Spent Fuel” means any fuel element or fuel component, solid or liquid, which has been used or
exposed to radiation in the Nuclear Reactor.
	 
	 	 	“Waste” means any waste material (i) containing Byproduct Material and (ii) resulting from
the operation by any person or organization of any Nuclear Facility.





Page 2 of 2









 





Interests and Liabilities Agreement




of




Swiss Reinsurance America Corporation

Armonk, New York

(hereinafter referred to as the “Subscribing Reinsurer”)




with respect to the




Workers’ Compensation Quota Share

Reinsurance Contract

Effective: July 1, 2009




issued to and duly executed by




Guarantee Insurance Company

Fort Lauderdale, Florida

and

any other insurance companies and/or affiliates which are now or

hereafter come under the ownership, control or management of

Guarantee Insurance Company



The Subscribing Reinsurer hereby accepts the following percentage shares in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned above:




25.0% of Coverage A

25.0% of Coverage B



This Agreement shall become effective at 12:01 a.m., Local Standard Time where the policy is
issued, July 1, 2009, and shall remain in force until 12:01 a.m., Local Standard Time where the
policy is issued, July 1, 2010.



The Subscribing Reinsurer’s share in the attached Contract shall be separate and apart from the
shares of the other reinsurers, and shall not be joint with the shares of the other reinsurers, it
being understood that the Subscribing Reinsurer shall in no event participate in the interests and
liabilities of the other reinsurers.



In Witness Whereof, the Subscribing Reinsurer by its duly authorized representative has
executed this Agreement as of the date undermentioned at:




Schaumburg,
Illinois, this 12th day of November in the year 2009.




	 	 	 	 	 
	 	 	 
	 	
/s/ Jeff  [ILLEGIBLE]  Vice President
 	 
	 	Swiss Reinsurance America Corporation 	 
	 	By: Swiss Re Underwriters Agency Inc., its authorized representative 	 
	 



POR 1023255








[A]